The state's new health care reforms, slated to kick in by August, are supposed to blaze new ground for the nation, using locally based groups of Oregon providers, hospitals and clinics to save money while offering innovative, high-quality care for the neediest.

Now, two national health care companies that serve Medicaid patients in other states want to take advantage of the new law to do business in Oregon, causing lawmakers to cry foul.

Centene Corporation of Missouri and United Healthcare of Minnesota are among about 50 groups, companies and nonprofits that submitted letters of intent to form coordinated care organizations for the Oregon Health Plan. The state spends more than $3 billion a year in state and federal funds to care for 650,000 low-income people.

Oregon's reforms, passed in 2011 and earlier this year , do not ban out-of-state or for-profit firms from qualifying as care organizations. Whether a firm meets standards won't be decided by state officials until applications are submitted and reviewed starting this month.

Supporters say the national firms offer expertise and resources. Critics, however, are raising the alarm. The out-of-state firms, both traded on the stock market, will be less likely to embrace the groundbreaking approach intended in Oregon, they say.

"I do not think this was the intent of the legislation," said Rep. Mitch Greenlick, D-Portland, of the national firms. A co-chair of the House Health Care Committee, Greenlick said state officials "should do everything possible to prevent them from coming in. I hope we hold their feet to the fire."

Others agree the Legislature never intended out-of-state firms to move in. "These were supposed to be locally driven," said Sen. Alan Bates, D-Ashland, who like Greenlick was deeply involved in the reforms.

Much like the rest of the country, Oregon already uses managed care organizations for Medicaid patients. The reforms were intended to create a different kind of group: larger, integrated with mental and dental health, and grounded in the community it serves.

Each provider group will be given Medicaid funding to provide for patients, emphasizing prevention to save money and keep the chronically ill out of costly hospitals.

"Coordinated care organizations will be local organizations," Bruce Goldberg, director of the Oregon Health Authority, said last week in a speech to the City Club of Portland. Oregon will shun old-style care in which "decisions were made hundreds and often thousands of miles away."

The national firms have contacted local health providers and say the law shouldn't prevent them from doing business in Oregon. Centene, for example, serves Medicaid patients in 14 states.

"They have had success coming into states and building those relationships, and that's what they're looking to do here," said Greg Peden, a Portland lobbyist hired by Centene. "I think they are very serious and would like to make this work."

"United Healthcare Community Plan has more than 25 years of experience supporting the healthcare challenges faced by Medicaid beneficiaries," she said.

Centene executives have met with officials at Gov. John Kitzhaber's office and Oregon Health Authority, which will decide which groups are certified. Centene heard nothing to suggest out-of-state firms are inconsistent with the new law, Peden said.

If the national firms meet the state's requirements – including a local advisory council, and relationships with local providers and county health departments, said Mike Bonetto, Kitzhaber's top health adviser, then "the state would be getting exactly what we've outlined."

United Healthcare plans to apply for certification by June, and Centene by August.

State officials should scrutinize every group to ensure a solid local provider network is in place, said Jan Buffa, who heads a Salem-area managed care organization called Willamette Valley Providers Health Authority. "If they don't do that, they could have a mess on their hands," she said. -Nick Budnick